Author
Joseph Moore

Over 500 days ago Russia mounted a full scale invasion of Ukraine, in the most consequential conflict to face Europe since the Second World War.

With $143billion+ worth of destruction to infrastructure and bombs continuing to fall, many are looking to the future herculean effort that will be required to rebuild a nation. To be truly effective, any rebuilding effort will need to have transparency at its heart.

In light of this, Transparency International UK partnered with the European Bank for Reconstruction and Development (EBRD), USAID, TI-Ukraine and others last month to host a forum on the sidelines of the Ukraine Recovery Conference. It focused on the key steps to recovery needed to build a transparent and accountable Ukraine in the years ahead.

Since the Maidan revolution of 2014, Ukraine has undergone what one speaker called a “hero’s journey” through the measures it has taken to combat corruption. At the fore of these efforts has been the anti-corruption bodies and reforms that have been put in place over the last decade – most significantly the Specialised Anti-Corruption Prosecutor’s Office (SAPO) – which has been given real teeth in supporting and overseeing the prosecution of officials found guilty of corruption. Recently the Deputy Minister for Infrastructure was detained by investigators and sacked for alleged corruption, whilst the President of the Ukrainian Supreme Court was also detained after receiving an alleged bribe. 

Following the invasion in February 2022, there was a real risk that fighting corruption would fall victim to the war with the temptation to hide issues as the country focused on combatting Russian aggression. However, Ukraine’s commitment to anti-corruption has continued and has been described by Eka Tkeshelashvili (Head of EU Anti-Corruption Initiative in Ukraine) as the biggest achievement of civil society during the wartime.

June’s forum highlighted the ways that Ukraine has been exposing corruption and creating a culture of transparency. For example procurement. The establishment of Prozorro (Ukraine’s public electric procurement system) is a genuine model of cooperation that has built trust and accountability in public procurement in Ukraine and has attracted multinational users such as Pfizer. It is also worth noting that the World Bank has recently assessed Ukraine’s procurement processes as fit for purpose. At the same time, further investment has been made into refining and improving Prozorro. This will include the implementation of automated systems for risk assessments and the introduction of a whistleblowing portal, accessible to citizens.

However, if the private sector is going to be successful in carrying out a risk/benefit assessment to convince respective boards, shareholders and suppliers that investing in a country undergoing war (and post-war) is a sound proposition, then three key things are essential.

Predictability

A predictable environment for investment is critical. Whilst difficult to ensure during a war, the forum heard how war insurance (financial protection against losses from events such as invasion and terrorism), would help to assuage some of this risk and that as a candidate state for EU entry, Ukraine has preferential market access to the European market. That market access will help business to determine whether to and how much to invest. Systems such as Prozorro and examples of corporate investment that have demonstrated that there is now a reduced risk of corruption in Ukraine’s procurement processes make a strong case for the return of international business when the war is over. Predictability is a key determinant of future planning.

Consistency

Ukraine has done much in terms of legislation and reform. Continued reform is needed. Measures that have already been brought in, such as the creation of the National Anti-Corruption Prevention Agency (NACP) in 2019 and the launch of the Digital Restoration Ecosystem for Accountable Management (DREAM) this year , should increase investor confidence. If this continues and a track record of cases is built, business can be increasingly confident of a market that is consistent and behaves reliably.

Transparency

The establishment of DREAM – a state digital ecosystem that provides a single digital pipeline for all reconstruction projects – creates a pathway to continue to build trust and transparency between the government, citizens, business, and financial institutions. It allows anyone to monitor project performance and efficiency and then use this to mitigate risks and improve the quality of projects.

Ultimately, much has been achieved in Ukraine when it comes to building transparency and preventing corruption despite the terrible war. The Ukrainian market has huge potential. If it continues to implement reforms and effective corporate risk mitigation measures, international business will be more inclined to return to the country. Multi-national companies have a critical role to play not just with investment but by making it clear that new anti-corruption and transparency measures are the way to build a prosperous Ukraine.